The corporate regulator has outlined measures it took in 2020 to ease the burden on licensees impacted by the pandemic, with delayed licence cancellations and wider acceptance of statutory declarations among the considerations made throughout the year.

In its ‘Licensing and professional registration activities‘ report for 2020, ASIC said it was aware the pandemic affected the plans of many new licensed advice entities.

Despite amendments to the Stronger Regulation Act – which came into effect February 18 and gave ASIC the power to cancel a licensee’s registration if it has not commenced business within six months of the licence being granted – the regulator said it held back on businesses that delayed commencement due to the pandemic.

“When appropriate, we have been flexible about not taking action to cancel licences and have extended the period in which applicants are expected to commence operating until at least February 2021,” the report stated. “Our intention is not to cancel a licence unless we identify specific concerns about the warehousing or commodification of the licence.”

The regulator also highlighted concessions made around the acceptance of proof documents, especially those involving overseas jurisdictions heavily affected by the pandemic.

“In response, we have accepted statutory declarations in a greater range of circumstances and have not required declarations to be notarised at an Australian consulate,” the regulator stated.

The allowances will continue, ASIC noted, while the pandemic continues to affect the financial services landscape.

“As licensees and applicants continue to experience the impact of the COVID-19 pandemic, we are committed to our flexible approach in responding to unforeseen impacts, provided that investor protection and market integrity are maintained.”

Business, but not as per usual

ASIC said it “performed strongly” against its service charter in 2020, especially in the context of “substantive additional assessment requirements” stemming from the Stronger Regulations Act.

The Act requires ASIC to perform a number of extra functions, including conducting ‘fit and proper person’ tests for license applicants, take firmer action on misleading information and allow hearings for denied applications.

Amidst the extra work, ASIC received roughly the same amount of applications this year (1,500) as last year (1,504), and finalised a comparable amount of licence-related applications (2,062) as it did previously (2,618).

The regulator finalised 50 per cent of AFS licence applications within 91 days, 70 per cent within 141 days and 90 per cent within 276 days.

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning. Contact at [email protected]
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